LPG cylinder-filling as manufacture: process making bulk gas marketable for consumer use is not mere repacking.

Filling LPG cylinders by transferring bulk LPG with admixture of air and safety fittings was treated as manufacture because the gas could not be marketed for consumer use in bulk form and became usable only after the filling process. The activity was therefore not a mere process of distribution. The court also held that the Scheme's ineligibility for repacking and the bottling entry in Annexure B did not apply: the bottling reference was confined to potable liquor or alcohol, and the cylinder-filling process involved manufacture rather than simple transfer from one container to another. The denial of sales-tax incentive was unsustainable and required reconsideration.

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Issues: (i) Whether filling LPG cylinders by transferring bulk LPG into cylinders with admixture of air amounts to manufacture for the purpose of the Rajasthan Sales-tax Incentive Scheme for Industries, 1987. (ii) Whether such activity falls within the ineligibility of repacking or the bottling entry in Annexure B to the Scheme.

Issue (i): Whether filling LPG cylinders by transferring bulk LPG into cylinders with admixture of air amounts to manufacture for the purpose of the Rajasthan Sales-tax Incentive Scheme for Industries, 1987.

Analysis: The definition of manufacture under the Rajasthan Sales-tax Act, 1954 is wide enough to include any process of preparing or making goods. The finding recorded was that LPG from bulk storage cannot be marketed for consumer use in that form and requires mechanical filling into cylinders with admixture of air and safety fittings to become usable as fuel. The process was held to bring the commodity to the stage of marketability and to complete the last lap of manufacture.

Conclusion: The activity amounts to manufacture and is not a mere process of distribution.

Issue (ii): Whether such activity falls within the ineligibility of repacking or the bottling entry in Annexure B to the Scheme.

Analysis: Entry 19 of Annexure B was held to be confined to distilling, storing, bottling, blending or brewing of potable liquor or alcohol and not to bottling of all commodities. Item 6 concerning repacking was held inapplicable because the filling of LPG cylinders involved a manufacturing process necessary to render the gas marketable, not a mere transfer from one container to another. The Gujarat decision relied on below was distinguished on the ground that it proceeded on admitted facts and did not consider the role of admixture of air in making LPG marketable.

Conclusion: The activity does not fall within the repacking ineligibility or the bottling entry in Annexure B.

Final Conclusion: The denial of incentive was unsustainable, and the matter had to be reconsidered afresh in light of the finding that the LPG cylinder-filling activity is manufacturing and not repacking.

Ratio Decidendi: Where packing or cylinder-filling is indispensable to make a commodity marketable for consumer use, that process is part of manufacture and cannot be treated as mere repacking.

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